Equities bounce boosts London Stock Exchange

THE LONDON Stock Exchange expects more companies and investors to pile into equities, following a year in which revenues at the exchange group jumped 50 per cent and adjusted profits were up 17 per cent.

The LSE said turnover topped £1bn in the year ending March, boosted by its purchase of clearing house LCH.Clearnet a year ago. The deal is set to produce €60m (£48.9m) in cost savings next year, beating forecasts.

Admission fees for firms joining the LSE’s primary markets rose 24 per cent to £39.9m in the year. Secondary trading brought in revenues of £218.3m, up 15 per cent, as the value of daily trades rose eight per cent to £4.3bn.

Chief executive Xavier Rolet said a growing line of companies are joining the queue to list on the London market, after a whopping £34bn was raised in equity issues last year. He believes they will soon be followed by investors who scaled back their stock holdings during the 2008 crash.

“In the UK and Europe populations are ageing, pensions funds need to increase their revenues, and the real economy is the only place they are going to get that growth,” he told City A.M. yesterday.

“The real, long-term growth can only come from the real economy and that’s equities. All these pension funds are short [of equity holdings] today.”

For the year, the LSE Group posted adjusted pre-tax profits of £445.9m.

The firm’s information services arm, including the FTSE index, grew operating profits 15 per cent to £169.7m. The FTSE 100 has this week approached the highest level since 1999.